Initially, the Paymaster General only had responsibilities in relation to the armed services; but in 1848 two more offices were merged into that of Paymaster General: the Paymaster of Exchequer Bills, (1723-1848), and the Paymaster of the Civil Service, (1834-1848), (the latter followed by its Irish counterpart in 1861). He thus became 'the principal paying agent of the government and the banker for all government departments except the revenue departments and the National Debt Office'.[2]

Today, the Paymaster General is usually a minister without portfolio available for any duties which the government of the day may designate. The post may be combined with another office, or may be left unfilled.

Though the Paymaster General was titular head of the Paymaster General's Office, his or her executive functions were delegated to the Assistant Paymaster General, a permanent civil servant who (though acting in the name of the Paymaster General) was answerable to the Chancellor of the Exchequer.[2]

The Paymaster General was formerly in nominal charge (and at one time in actual charge) of the Office of HM Paymaster General[3] (OPG), which held accounts at the Bank of England on behalf of Government departments and selected other public bodies. Funds which were made available from the Consolidated Fund were then channelled into OPG accounts, from where they were used by the relevant body. OPG operated a full range of accounts and banking transaction services, including cheque and credit, BACS and CHAPS services for its customers via an electronic banking system. Integration of OPG accounts held with commercial banks was provided by the private company Xafinity Paymaster which is now part of the Equiniti group.

However, in 2008, the government announced that the Office of the Paymaster General would be incorporated into a new body, the Government Banking Service,[4] which also provides banking operations for HM Revenue & Customs and National Savings and Investments. Following the Bank of England's decision to withdraw from providing retail banking services,[5] retail banking services for the GBS are provided exclusively by the Royal Bank of Scotland and Citibank,[6] although the Bank of England still plays a role in managing the government's higher level accounts.[7]